VICTORIA EDUCATIONAL TRUST,KRISHNAGIRI vs. ITO, EXEMPTION WARD,, SALEM

ITA 1806/CHNY/2026Status: DisposedITAT Chennai05 October 2026AY 2019-209 pages
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What did the Tribunal hold?

The Tribunal condoned the delay of 89 days in filing the appeal, finding sufficient cause and no deliberate or mala fide intent. Regarding the primary claim for exemption under Section 11, the Tribunal noted it was not pressed by the assessee. However, concerning the alternate ground (H), the Tribunal held that even if the assessee is not eligible for exemption under Section 11 and is assessed as an AOP, the gross receipts cannot be treated as taxable income. The real or net income, after allowing expenditure incurred wholly and exclusively for carrying on its activities, should be computed. The Tribunal followed its co-ordinate bench's decision in the assessee's own case for AY 2018-19, restoring the issue to the Jurisdictional Assessing Officer (JAO). The JAO is directed to verify the expenditure incurred by the assessee in connection with its educational activities and allow legally admissible expenditure. The taxable income is to be determined thereafter, giving the assessee an opportunity of being heard. The Tribunal clarified that this adjudication is confined to the alternate ground and does not decide the primary claim for exemption under Section 11.

What were the facts?

The assessee, Victoria Educational Trust, filed its return of income for Assessment Year 2019-20 on 24.06.2020, claiming exemption under Section 11 of the Income Tax Act, 1961. The return was processed under Section 143(1), and credit was not granted for claimed expenditure, application, and accumulation of income, resulting in a demand of Rs. 61,35,679. The assessee filed a rectification application under Section 154, which was rejected by the Income Tax Officer (AO) on 18.11.2024. The AO noted that the audit report in Form 10B was filed belatedly on 06.06.2020, and the trust's registration under Section 12AA was granted only from AY 2020-21. The assessee's appeal to the CIT(A) was dismissed on 22.10.2025, holding that exemption under Sections 11 and 12 is available only to registered trusts.

What were the issues?

1. Whether the delay of 89 days in filing the appeal before the Tribunal should be condoned? (Question of procedure) 2. Whether the assessee, Victoria Educational Trust, is eligible for exemption under Section 11 of the Income Tax Act, 1961, for AY 2019-20, despite not having registration under Section 12A/12AA for the relevant year? (Question of law) 3. In the event the assessee is not eligible for exemption under Section 11, whether the AO ought to have considered the expenditure and application of income incurred by the assessee while assessing it as an Association of Persons (AOP)? (Question of mixed law and fact) Assessee's Contentions: - The delay in filing the appeal was due to sufficient and reasonable cause, and a liberal approach should be adopted for condonation. - The CIT(A) failed to adjudicate the alternate ground that if treated as an AOP, the AO should have given credit for accumulation of income, application, and expenditure. The assessee relied on the Tribunal's decision in its own case for AY 2018-19 (ITA No. 3266/Chny/2025) where the issue was restored to the AO for verification of expenditure. Revenue's Contentions: - The revenue did not press its appeal against the condonation of delay. - The revenue fairly submitted that if the assessee is not eligible for exemption under Section 11, the income may be computed by treating the assessee as an AOP and allowing eligible expenditure.

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 12A,Section 12AA,Section 154,Section 143(1),Section 139(9),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S. R. RAGHUNATHAz

Hearing: 11.08.2026Pronounced: 05.10.2026

PER S. R. RAGHUNATHA, AM :

This appeal by the assessee is arising out of the order dated 22.10.2025 passed by the Learned Commissioner of Income Tax (Appeal)-3, Delhi (in short “ld.CIT(A)”) for the assessment year (A.Y) 2019-20 against the order u/s.154 of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the Income Tax Officer, Exemption Ward, Salem (in short ‘AO’), dated 18.11.2024. 2. At the outset

The order continues below.

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